Liquidations

There are three types of liquidation which we handle as follows :

» Members Voluntary Liquidation (MVL)

» Creditors Voluntary Liquidation (CVL)

» Compulsory Liquidation

An MVL involves a company which is solvent and is able to pay all of its debts within a period not exceeding 12 months. The other two types deal with insolvent companies

Procedures

A company is placed into voluntary liquidation by the passing of a resolution at an extraordinary meeting of the members. The creditors in an insolvent liquidation get the opportunity to appoint their own liquidator if they so wish

The duty of a liquidator in each case is to collect in the assets of the company and distribute them equally amongst the creditors

A company is placed into compulsory liquidation by the court making a winding up order. Among the persons who can petition the court for a winding up order are :

» A creditor

» A shareholder

» The directors

» The company itself

» The Secretary of State

Practical

A liquidator in an insolvent liquidation has a duty to investigate the affairs of the company and also has to report to the Department of Trade and Industry on the conduct of the directors prior to liquidation. The DTI may then decide to take action to disqualify the directors

Liquidators have many powers, some of which are as follows :

» Reverse transactions which transfer real assets at an undervalue

» Reverse a preference payment to a creditor

» Take action to make the director personally liable for the company's debts

» Order any person to provide information relating to the company's affairs